US benchmark crude oil closed at $105.74 a barrel in New York for August delivery, $0.10 lower than it began the day. There was a slight uptick in the price of Brent crude, which closed at $113.30 a barrel in London, up $0.09 for the day. Brent crude is a benchmark for international oils which are used by many US refineries. Even with the slight increase on Friday, international oils have overall fallen in price over the last few days, and both international and US oils have receded from their all-time highs in 2014. This could be an indication that traders are calming about the geopolitical unrest in Iraq, and don’t have as much fear the conflict will spread to southern Iraq, where much of the oil is produced.
At the same time, the price of gasoline remained at $3.68 per gallon, the same price that held yesterday, according to AAA. While this is $0.20 higher per gallon than it was at the same time last year, it appears it won’t go much higher with the calming oil markets. Still, there isn’t much chance the prices will fall much for the Fourth of July weekend, making gas prices the most expensive they have been since 2006 over this holiday. Traditionally, gas prices fall in June, but this trend was disrupted with unrest in Iraq this year.
There is still a lot of unknowns which could quickly change this current steadiness, especially if unrest escalates in Iraq again. At least for the time being, it appears we may see both oil and gas prices ease and begin to fall in the coming weeks if no other major changes in outlook occur.
(Photo courtesy of Patrick Emerson)